Inadvisable Move

May 18, 1986

I READ with dismay that the city of Orlando is considering the disinvestment of city trust funds from U.S. corporations doing business in South Africa. There are two compelling reasons why this is inadvisable.

-- Corporations benefit only from the sale of its stock as a new issue. Once this stock is issued and sold by the company all subsequent trading of this stock is in the open marketplace by a buyer and seller hoping to profit from their transaction.

Shareholders in a company have a voice in the operation of that company and can influence corporate policy. To divest oneself of these shares is to abandon this influence. The hue and cry of college students, professors and politicians notwithstanding, how can this disvestiture possibly aid the anti- apartheid cause?

U.S. corporations are the one shining light in the fight against apartheid and to surrender the American shareholders' influence in these companies is to turn our backs on the blacks of South Africa. I would guess that any mass sale of these securities by Americans would quickly be bought up by foreign interests to the detriment of the anti-apartheid movement.

-- These corporations are the cream of U.S. industry -- witness the fact that their stock is found in almost all trust and pension fund portfolios. The administrator of these funds has a fiduciary responsibility that transcends any pie in the sky moral issue and the wholesale divestiture of millions of dollars worth of stock cannot fail to have an adverse impact on these trust funds. Who assumes this awesome responsibility?